Transylvania Regional Hospital

1. Transylvania Regional Hospital

3. TRH Overview • Founded in 1933 • Not-for-profit, governed by a volunteer board • Critical Access Hospital • 630 employees, 450 FTEs • 58 active medical staff members and 80+ courtesy/consulting physicians • $65+ million in net revenue/year • 1,969 acute admissions/year • 14,799 emergency visits/year • 35,862 diagnostic & ancillary visits/year • Surgeries per year: 1,768 outpatient, 422 inpatient • 18,094 home health visits/year • 23 employed providers covering primary care and 7 specialties • Contracted physicians for ED, adult and pediatric hospitalist services • Affiliate of Mission Health System, January 1, 2011

4. Medical Specialties • Urology • Pediatrics • Radiology • Anesthesiology • Sports Medicine • Pathology • Hospitalist Medicine • Emergency Medicine • Nephrology • Ophthalmology • Otolaryngology • Family Practice • Internal Medicine • General Surgery • Orthopedic Surgery • OB/GYN Services • Pulmonology • Sleep Medicine • Cardiology • Gastroenterology • Hematology • Oncology Post-Acute Services • Transitional Care Unit • Home Health Services • KOALA Adult Day Services • AgeWell Fresh Start Behavioral Health • Hospice

6. Eric K. Shell, CPA, MBA Stroudwater Associates 50 Sewell Street, Suite 102 Portland, ME 04102 Phone: (207)221-8257 or (201)650-2702

7. Attributes of Success Critical Access Hospitals Presentation for New Hampshire Hospital Association June, 2010 Operational Assessment with Education Specifically for TRH

8. TRH provided the following in advance of the site visit: • Most recently filed cost report • Interim cost report • Internal cost report model with cost report dashboard • Most recent financial statement • Statistical report • FY 2011 budget • Days in AR & other key dashboard measurements • Projection for Home Care joint venture • Provider based clinic analysis for Cancer Center

9. Educational Session Agenda • 7:30 – 8:00 Tour of Hospital • 8:00 – 8:30 Set up for Meeting • 8:30 – 11:00 Overview of Presentation • 11:00 – 12:00 Cost Report Issues for TRH • 12:00 – 1:00 Lunch • 1:00 – 3:00 Continue Discussion of Cost Report Issues • 3:00 – 5:00 Development of Go-Forward Strategies

10. Presentation Overview • Attributes of Successful Critical Access Hospitals • Understand Rural Hospital Economics • The “Right” Medical Staff • Focus on Both Inpatient and Outpatient Volume • Effective Organizational Design • Strong Revenue Cycle Practices • Understand Physician Practice Management • Facility Design that Supports Patient Care Model • Developing Information Technology Systems • Current Third Party Contracts and Charge Master • Accurate Medicare Cost Report • Know their Market Service Area • Summary/Discussion

11. Action Items/”Take-A-Ways”/Next Steps • Reduce Expenses • Goal: organizational accountability and ownership • Develop required variance analysis reporting system on monthly “budget to actual” reports and system to correct variances • Incentive program to be considered for management team • Evaluate PT contract • More active review of nurse staffing ratios • Hard review of profitability of SNF • Evaluate physician contracts for appropriate matching of RVUs to benchmarks • Increase Volume (Medicare or non-Medicare) • Grow outpatient lab volume by 20% by March 31, 2011 • Target inpatient census of 20 by December 31, 2010 • Increased census management techniques • ERA admission rates per physician • More capacity/throughput systems • Clinical integration model to be developed in partnership with physicians • Customer service plan “might could” be developed and rolled out to physician practices

12. Action Items/”Take-A-Ways”/Next Steps • Increase “Slope” of Revenue Line • Cost Report Opportunities • ROIs on all non-reimbursable cost centers taking into effect Foundation • SNF • Hospice/Home Health • CAP • Lifeline • Koala Care • Evaluate use of hospice patient days • Time study for Labor and Delivery • Time studies for ER standby – target 15 minutes/visit • Subscripting A&G • Consolidating Radiology and CT • Time studies for Medical Records • Square footage for sleep lab • TRH Home office allocation review and better understanding • Home health square footage • Review housekeeping allocation • Review interest offset calculation with DH

13. Action Items/”Take-A-Ways”/Next Steps • Increase “Slope” of Revenue Line (continued) • Tie into Mission Health third party contracts ASAP after affiliation • Analyze charge structure and third party payment amounts for physician practices and make recommendations for improvement • Mission and TRH to develop home office cost report strategy • Review Cancer Center Billing – call John Behn to discuss • Revenue cycle team to meet more frequently and move to operations from reporting • Share bell curve of individual physician practices with practice managers • Prioritize insurance verification prior to patient visit in physician offices • Point of service collection incentive for physician practices

14. Accountability Tool – Where Are We Handout

15. Contact Information: Bob Bednarek bbednarek@trhospital.org (828)883-5302